The CEO of Sotheby's International Realty Canada says a modest increase in the overnight lending rate will probably have very little impact on the Canadian housing market, particularly in the high-end segment.

Brad Henderson says high net worth individuals tend to be less affected by increases in interest rates than Canadians who spend a significant portion of their income on housing-related costs.

His comments came as the realtor released its latest report on the high-end real estate market, noting that the Greater Toronto Area led the market in the first half of 2017 in terms of sales of homes worth over $1 million.

The GTA saw 14,292 high-end homes change hands from January 1 to June 30 of this year — an increase of 41 per cent compared to the same period last year.

However, Sotheby's says sales in the top-tier segment of the GTA contracted slightly in May and June following new rules from the Ontario government, including a 15 per cent tax on foreign speculators.

Sales of high-end homes in Vancouver slumped 23 per cent in the first half of the year to 2,385 units, while Calgary saw some renewed optimism, with sales up 24 per cent from a year ago to 395 units.

Henderson says that if the increases are only 25 basis points each, with long periods of time between rate hikes, to a total of 50 basis points, the impact on the real estate market will be minimal.

If the increases are more dramatic — for example 100 or 200 basis points — there will be a "dampening effect" on all real estate across Canada, he says.

"Unfortunately interest rates are not a very exact tool," says Henderson. "They are a very blunt instrument, and it will have the same effect on markets that aren't quite as frothy as Toronto and Vancouver."